FM asks banks to cut lending rates to spur economic activity

NEW DELHI: Finance Minister Pranab Mukherjee on Wednesday asked banks to cut interest rates and provide cheap credit to industry in order to spur economic activity. (Watch)

"As a financial intermediary the banks have to stand by to provide credit at reasonable rates," Mukherjee said addressing the chief executives of public sector banks.

The Minister said reduction in key rates by the Reserve Bank is not "adequately (getting) reflected in the reduction of BPLR (benchmark prime lending rates) of banks".

Besides the officials of the finance ministry, the meeting is being attended by heads of major banks and financial institutions including SBI Chairman O P Bhatt, PNB chief K C Chakrabarty and IIFCL Chairman SS Kohli.